Global Journal of Management and Business Research: D

Accounting and Auditing

Volume 16 Issue 2 Version 1.0 Year 2016
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals Inc. (USA)
Online ISSN: 2249-4588 & Print ISSN: 0975-5853

The Importance of CSR in Financial Reporting Standards

By Dr. Edel Lemus, DBA
Albizu University, United States
Abstract- The purpose of this article is to review the recent trends related to corporate social
responsibility (CSR) and financial reporting standards. The researcher presents four CSR
background theories to evaluate the importance of sustainability in the financial reporting arena.
The Big Four accounting firms are promoting the importance of adopting CSR in financial
statements. Scholars and practitioners acknowledge that there is an existing relationship
between corporate governance and CSR. The 7Ps presented in the study served as guidance for
developing a sustainable and adequate CSR financial reporting system. The three pillars that
support sustainability are environmental, social, and economic. It is expected that in the future
the triple bottom line theory (TBL) will be known as integrated report (IR). Evidently, the adoption
of corporate responsibility in financial statements has the ability to increase the amount of
relevant information provided to shareholders and stock exchange markets around the world.
Keywords: corporate social responsibility (CSR), financial statement analysis, global reporting
initiative (GRI), sustainability factors, environmental management accounting (EMA), integrated
report (IR).
GJMBR - D Classification : JEL Code : M49

TheImportanceofCSRinFinancialReportingStandards

Strictly as per the compliance and regulations of:

© 2016. Dr. Edel Lemus, DBA. This is a research/review paper, distributed under the terms of the Creative Commons Attribution-
Noncommercial 3.0 Unported License http://creativecommons.org/licenses/by-nc/3.0/), permitting all non-commercial use,
distribution, and reproduction in any medium, provided the original work is properly cited.
 The Importance of CSR in Financial Reporting
Standards
Dr. Edel Lemus, DBA
Abstract- The purpose of this article is to review the recent
trends related to corporate social responsibility (CSR) and
financial reporting standards. The researcher presents four
CSR background theories to evaluate the importance of
sustainability in the financial reporting arena. The Big Four
accounting firms are promoting the importance of adopting
CSR in financial statements. Scholars and practitioners
acknowledge that there is an existing relationship between
corporate governance and CSR. The 7Ps presented in the
study served as guidance for developing a sustainable and
adequate CSR financial reporting system. The three pillars that
support sustainability are environmental, social, and
economic. It is expected that in the future the triple bottom line
theory (TBL) will be known as integrated report (IR). Evidently,
the adoption of corporate responsibility in financial statements
has the ability to increase the amount of relevant information
provided to shareholders and stock exchange markets around
the world.
Keywords: corporate social responsibility (CSR), financial
statement analysis, global reporting initiative (GRI),
sustainability factors, environmental management
accounting (EMA), integrated report (IR).
I. Introduction
I
n an effort to stay abreast with corporate social
responsibility (CSR) and financial reporting standards,
this article will introduce four subject areas (1).
Corporate Social Responsibility (CSR) Historical
Approach, (2). Corporate Social Responsibility (CSR)
Background Theories, (3). Corporate Social
Responsibility (CSR) and Financial Reporting, and (4).
Three Sustainability Factors that are relevant to small
and publicly traded companies around the globe. In
1929, the market crash on Wall Street led to the
emergence of CSR. Four background theories are
presented throughout the study as the pillar of CSR in
the financial market. In 1999, the AA1000 series began
to promote financial reporting sustainability. By 2000,
the Global Compact was established by the United
Nations (UN). Since the inception of the Global
Compact, 10 principles have been designed to promote
human rights, labor, environmental, and anti-corruption
standards. In the evolution of international accounting,
Carnegie and Napier (2002) presented seven
dimensions from a comparative aspect surrounding how
to treat CSR and financial reporting in different financial
Author: Dean of Student Affairs, Assistant professor and institutional
business development professor for the Business Department, Albizu
University, United States. e-mail: edellemus@hotmail.com
markets. In 2005, at the World Summit, the three factors
of environment, social, and economic were reaffirmed
as efficient and effective in a company’s financial
decision-making process.
2016
In the 21st century, CSR is an emerging field in
the accounting and finance industry. Sustainability is
Year
understood as having environmental, social, and
economic components. As mentioned by Marimon,
Alonso-Almeida, and Rodriguez (2012), CSR has 25
received several classifications, including “UN Global
Global Journal of Management and Business Research ( D ) Volume XVI Issue II Version I
Compact Principles, OECD Guidelines for Multinational
Enterprises, GRI, ISO 26000, AA1000, ISO 14001 and
SA88000” (p. 183). In 2011, Noble, Mattison, and
Matsumura (2015) their statistical research showed that
about 57% of the U.S. Fortune 500 companies reported
CSR practices on their websites. In the global market,
about 95% of the largest 250 companies issue CSR
reports and follow CSR compliance guidelines.
Typically, the CSR report covers important areas such
as the company’s goals and objectives, environmental
performance, and the human impact.
II. Review of the Literature
a) Historical View of Corporate Social Responsibility
(CSR)
In 1929, the market crash on Wall Street led to
the emergence of CSR. The main goal and objective of
CSR is to align social aspirations and compliance with
governance in the business sector. CSR continues to
drive small and large business enterprises by helping
them achieve the status of a “good citizen.” For
instance, small companies have increased their social
engagement activities. In Australia, the business sector
found that there is a mutual relationship between
stakeholder and social capital theory. Ferrell, Fraedrich,
and Ferrell (2015) indicated that stakeholder theory is
understood by three approaches such as normative,
descriptive, and instrumental. The normative approach
deals with ethical guidelines. The descriptive approach
suggests the importance of understanding a firm
business behavior in addressing business decision
strategies. The instrumental approach embraces
management and organizational process. According to
Sen and Cowley (2013) defined social capital theory as
“Social capital, broadly speaking, refers to social
networks, the reciprocities that arise from them and their
value within the business environment” (p.416).
Therefore, research studies indicate that the CSR
© 20 16 Global Journals Inc. (US)
 The Importance of CSR in Financial Reporting Standards
conceptual framework brings more alignment in small
companies than in medium and larger enterprises (Sen
& Cowley, 2013).
The definition of CSR consists of five important
aspects: (a) environment, (b) social dimension
sustainability, (c) economic advancement, (d)
stakeholder behavior, and (e) ethical evolution of
society. CSR can be adopted by multinational
corporations (MNCs) and enterprises that operate in
different cultural background settings. As a result, CSR
in the international market as noted by Jacob (2012)
acts as an ambassador among communities and the
business sector.
2016
MNCs in the global market can reduce poverty
by promoting their good citizen status and improving the
Year
living standards of their employees. Solid CSR guidance
26 policies require innovation and new avenues to settle the
cultural differences that exist among small companies
and large enterprises. For example, the triangulation that
Global Journal of Management and Business Research ( D ) Volume XVI Issue II Version I
exists (as cited in Montinho & Souther, 2010, p. 281)
between the organizational evaluation, stakeholder
criteria, and employees’ cultural environment is known
as CSR. Therefore, CSR is understood as the universal
language of business compliance that provides social
benefits to small and medium sized enterprises in the
international arena (van Tonder & Roberts-Lombard,
2013).
III. Background Theories
a) System theory
This theory ensures democracy and economic
freedom by promoting equality among citizens in society
by building sustainability through a value chain. The
primary foundation of system theory consists of an open
market economy. System theory shares three unique
aspects: social values, entity, and the environment.
These three aspects contribute to economic creation,
social changes, and the evolution of nature.
In early 2000, system theory (Emery, 2000) was
interpreted as a reliable conceptual framework. Bala
(2010) suggested three theoretical aspects that
contribute to economic growth. The first theoretical
aspect emphasizes the importance of reducing inflation
and encourages consumers to contribute to the
economy. The second theoretical aspect is to establish
rules and regulations by accurately measuring
international investment portfolios. The third theoretical
aspect predicts the sustainability of the global economy.
b) Triple bottom line theory (TBL)
In 1997, John Elkington was the founding father
of the triple bottom line (TBL) theory. The conceptual
accounting framework of the TBL theory is measured
through social sustainability performance, economic,
and financial environment. The most important
dimensions of the TBL theory are the 3Ps, or people,
planet, and profits. Over the past 30 years,
© 2016
1 Global Journals Inc. (US)
organizations have adopted the TBL theory to be better
corporate citizens. Therefore, the core value of the TBL
theory is to promote sustainability through the value
chain (Slaper & Hall, 2011).
Christofi, Christofi, and Sisaye (2012) argued
that the TBL is sustainable when CSR is standardized,
because CSR addresses the importance and relevance
of the well-being of both citizens and corporations.
Since the creation of the TBL theory, researchers in the
accounting arena have recommended expanding the
standardization aspects and the development of
corporate social performance. Sethi (1975) contributed
to the aspects and development of corporate social
performance in the accounting field. Then it was
expanded by Carroll (1999) challenging the corporate
sector and adapting to the rapid change of
globalization.
In Australia, the TBL theory helped overcome
corporate boundaries in the public sector and built the
groundwork for sustainability. The main objective of the
TBL theory is to promote compliance and sustainability
among businesses. In the era of globalization, the TBL
theory helps introduce reliability, accuracy, and
transparency into the world’s financial reporting market
(Mitchell, Curtis, & Davidson, 2012).
c) Agency theory
The agency theory indicates that companies
can use different sources of information related to
results by decreasing asymmetries across the market
(Cormier, Magnan, & Van Veltoven, 2005). Adequate
CSR disclosure helps reduce differences between a
company’s performance and their stakeholders
expectations (Bonsón & Bednárová, 2015; Ferrero et al.,
2013).
d) Stakeholder theory
In 1984, Freeman introduced the stakeholder
theory and mentioned that the core value of this theory
is social responsibility. In order for a company to reduce
information asymmetry, there needs to be equilibrium
among stakeholders and CSR financial reporting.
Therefore, the stakeholder theory should be viable to
companies and easy the relationship among
stakeholders (Bonsón & Bednárová, 2015).
IV. Corporate Social Responsibility (CSR)
and Financial Reporting
Presently, CSR remains at a premature
developmental stage. It seems inevitable that CSR will
be a part of financial reporting standards. For example,
in accounting, the areas that are related to CSR are
financial accounting, managerial accounting, and
income tax reporting. In the 21st century, CSR is an
emerging field in the accounting and finance industry.
The three most important financial reporting standards
under CSR are Global Reporting Initiative (GRI) G3
 The Importance of CSR in Financial Reporting Standards

standards, AA 1000 series, and the UN Global
Compact’s Communication on Progress (COP; Tschopp
& Huefner, 2015).
a) Global Reporting Initiative (GRI) G3 standards
In 1999, for the first time in history, the G3s were
issued as an exposure draft. By 2000, the GRIs were
revised and officially launched in 2002. In 2006, the G3
guidelines were published and the new G4 standard
was launched in 2013. Under G3, five guidelines are
promoted by meeting the company’s reporting
principles, financial reporting guidance, and followed by
disclosure requirements as illustrated by Tschopp and
meeting the auditing principles outcomes of
assurance, transparency, and accuracy.
7. Profession: promote a code of conduct in the
accounting profession by leading organizational
groups in a sustainable manner.
The 7Ps can serve as road map guidance in
developing a sustainable and adequate CSR financial
reporting system.
c) UN Global Compact’s Communication on Progress
(COP)
In 2000, the Global Compact was established
by the UN. Since the inception of the Global Compact,

2016
Huefner (2015): “strategy and analysis; organizational 10 principles were designed to promoted human rights,
profile; report parameters; governance, commitments, labor, environmental, and anti-corruption standards.

and engagement; [and] management approach and
performance indicators” (p. 566). G3 standards promote
quality assurance and reliability (Tschopp & Huefner,
2015).
Year
According to Tschopp and Huefner (2015), “The Global
Compact network is currently comprised of almost 800
27
business associations, 57 labor organizations, over
2,200 civil society organizations, over 700 academic

Global Journal of Management and Business Research ( D ) Volume XVI Issue II Version I
b) AA1000 series participants, 171 public sector organizations, and 73
municipal organizations (UNGC 2013)” (p. 566). The
In 1999, the AA1000 series began to promote
participation of stakeholders in the UN Global Compact
financial reporting sustainability. The main standards
increased by 56% from 2003 to the present. Therefore,
included in the AA1000 series are assurance principles
the main objective of the Global Compact is to promote
standards and stakeholder engagement. By 2008,
transparency in corporate governance.
AA1000 help companies implement CSR into their
financial reporting systems. The AA1000 series is d) Pillars of Sustainability
designed to help companies address financial reporting Triangulation is the support and representation
issues in the areas of stakeholder engagement, social of three important factors that support sustainability
identity, and environmental key leading indicators. The (See Figure 1). The three pillars that support
AA1000 framework should follow CSR guidelines. For sustainability are environmental, social, and economic.
example, the AA1000 Accounting Principles Standard In 2005, at the World Summit, these three factors were
focuses on financial reporting and auditing, the AA1000 reaffirmed as efficient and effective in a company’s
Assurance Standard follows the CSR audit guidelines financial decision-making process. In other words, if
report, and the AA1000 Stakeholder Engagement companies are not able to adopt these three important
Standard promotes stakeholder quality engagement factors, they are not likely to survive (Noble, Mattison, &
and compliance (Tschopp & Huefner, 2015). Matsumura, 2015).
In the evolution of international accounting,
Carnegie and Napier (2002) presented seven
dimensions from a comparative aspect surrounding how
to treat CSR financial reporting in different financial
markets. The 7Ps are illustrated below:
1. Period: understood as the accounting development
through a given period of time by considering
economic, political, and social aspects.
2. Places: the treatment of accounting policies in
different geographical regions.
3. People: the interests of people in leadership by
transforming the development of accounting
policies into a robust framework.
4. Practices: promote financial transparency and
sustainability by preventing accounting fraud.
5. Propagation: the requirement of speaking one
singular accounting language in the world’s financial
market.
6. Products: the creation of reliable accounting
software and constructing better financial reports by

© 20 16 Global Journals Inc. (US)

 The Importance of CSR in Financial Reporting Standards
2016
Year
28
Figure 1 : What do we know about sustainability?
Global Journal of Management and Business Research ( D ) Volume XVI Issue II Version I
Certo and Certo (2012) indicated that
businesses are highly motivated by managerial
obligations and need the right to protect society. They
developed a conceptual framework in prior research
studies to triangulate business, society, and cross-
cultural settings. The conceptual framework embraces
sustainability and is supported by five areas: (a) social
responsibility, (b) business and economic freedom, (c)
social cost, (d) consumer behavior, and (e) business
operating as an independent institution. Milton Friedman
argued that society should be run by citizens, not by
businesses. For example (as cited in Jayakumar,
Anbalagan, & Kannan, 2012), the primary focus of an
MNC is society. An MNC possess the unique
characteristic of cross-cultural diversity. It has been
proven over the years that MNCs act as good citizens in
the international business arena.
CSR plays an essential role in audit committees
because the audit committees are constantly dealing
with regulatory governance and compliance. Presently,
Bonsón and Bednárová (2015) in their study indicate
that audit committees are taking an active role in
organizational governance and also in the area of risk
management. An existing area that is underdeveloped
under CSR is the measurement and performance of
audit committees. For example, in Australia, those in the
accounting and financial sector are investigating how to
expand CSR to audit committees by evaluating practice
performance. Therefore, three areas that are crucial
when evaluating the practice performance under CSR
are corporate governance, policy measurement, and
assessment processes (Bonsón & Bednárová, 2015).
Companies that have adopted CSR into their
financial reporting experience a high auditor quality
standard as compared to companies that have not
adopted CSR. The areas of high auditor quality standard
encompass the company’s reputation, financial
improvement, less financial risk, and higher earnings
© 2016
1 Global Journals Inc. (US)
accruals. On the other hand, companies that do not
adopt CSR into their financial reports tend to experience
low auditing quality standards and increased financial
risk. Prior studies conducted by Bonsón and Bednárová
(2015) in this field demonstrated that there is a positive
relationship between audit committee quality and
auditor for tenure, because this positive relationship
contributes to audit quality. For example, companies
filing CSR reports prevent internal financial reporting
weakness, experience a higher return on assets, and are
more likely to have the support of the Big Four
accounting audit firms.
Companies in the international market want to
understand the existing relationship between
stakeholder theory and the TBL theory. CSR appears to
be a promising concept in academia and the business
world. Companies that have adopted CSR have been
forced to disclose more information in their financial
statements related to the environmental and social
activities. As a result, CSR came under discussion after
serious financial scandals took place in 1929 with the fall
of Wall Street, 2001 the collapse of Enron Corporation,
the 2008 economic recession, and labor rights and
protection in the emerging economies market (Noronha,
Tou, Cynthia, & Guan, 2012). Presently, CSR is a
necessity in financial statements because it promotes
financial sustainability among financial institutions,
boosts corporate profitability, and fosters good public
relations (Bonsón & Bednárová, 2015).
Over the past 10 years, several standards under
CSR have been promoted in the global arena. As
mentioned by Marimon et al. (2012), CSR has received
several classifications, including “UN Global Compact
Principles, OECD Guidelines for Multinational
Enterprises, GRI, ISO 26000, AA1000, ISO 14001 and
SA88000” (p. 183). Research studies have shown that it
is imperative to seek uniformity in a CSR international
financial reporting system. For example, 40% of
 The Importance of CSR in Financial Reporting Standards
companies worldwide follow and comply with GRI
standard (Bonsón & Bednárová, 2015).
The EU proposed the need for publicly traded
companies to expand their CSR reporting. The EU
defined CSR as the responsibility of enterprises within
society. The challenge in the business world is to link
CSR and leadership competitiveness. For example, in
2003, the EU mandated under article 46 of the Fourth
Company Law Directive that companies must properly
disclose financial and non-financial items as key leading
performance. The goal and objective under article 46
was to promote corporate governance by public
companies and most importantly demonstrate
diversification in the organization’s CSR policy
(Ambrose, 2013).
In 2011, Aktas, Kayalidere, and Kargin (2013)
statistical research showed that about 57% of the U.S.
Fortune 500 companies reported CSR on their websites.
In the global market, about 95% of the 250 largest
companies issue CSR reports and follow CSR
compliance guidelines. Typically, the CSR report covers
important areas such as the company’s goals and
objectives, environmental performance, and the human
impact. As a result, the company’s 10K report at year
end covers CSR and financial reporting in depth. The
top four accounting firms are leaders in providing quality
assurance information as related to CSR data.
Therefore, the future of the TBL theory will be known as
an integrated report (IR). Notably, the IR remains in its
infancy stage and is being piloted by publicly traded
companies. The idea behind IR is to provide a holistic
view to stakeholders where material financial information
and non-financial information can be consolidated in
one report.
For example, according to Noble et al. (2015),
“As of 2012, over 1,100 institutional investors with over
$30 trillion of assets under management had signed on
to the Principles of Responsible Investing (PRI) backed
by the United Nations (UN)” (p. 139). This is a reflection
of sustainability and financial reporting by institutional
investors making a rational investment decision to
include the environment, social, and corporate
governance.
Primary financial statements, such as the
income statement, balance sheet, and statement of
cash flow, are the main sources of relevant information
to users. The decision-makers are investors, lenders,
and other creditors in the financial sector. The financial
statements are constructed for the public interest. Also,
it has been argued that non-financial information is
important. Evidently, information reported in the financial
statements helps decision-makers to execute better
financial strategies. As a result, CSR and sustainability
play vital roles when the numbers are reported in
financial statements. For instance, financial reports and
sustainability have been analyzed from a GRI
perspective. Therefore, a company utilizing sustainability
for its financial reporting approach should select a
disclosure management approach and financial key
performance leading indicators (Aktas, Kayalidere, &
Kargin, 2013).
Yu and Ting (2012) indicated that financial
investors and shareholders have a corporate
commitment to society. Companies that are willing to
adopt CSR into their financial reports experience higher
financial sustainability. Corporate commitment is the
path to reaching sustainability. Companies that focus on
climate change issues can protect investors,
stakeholders, and the community. In the global market
arena there is an existing relationship between country-
2016
level characteristics and a country’s commitment to
Year
sustainability (Yu & Ting, 2012).
In 2008, the financial crisis marked an important
unprecedented value in the world financial market. 29
Antonia García-Benau, Sierra-Garcia, and Zorio (2013)
evaluated CSR reporting and CSR assurance strategy in
Global Journal of Management and Business Research ( D ) Volume XVI Issue II Version I
Spain under an economic recession. Companies in
Spain witness CSR reporting as a business threat
because companies had to cut cost and discontinue
operations. Also, the Return On Equity (ROE) was
affected in the long-run. On the contrary, CSR
assurance added value to CSR reporting as companies
were navigating through an economic recession.
Therefore, it is evident that stakeholder trust can be
reinforced by embracing CSR reporting and a CSR
assurance strategy (Antonia García-Benau et al., 2013).
Financial analysts in the world’s financial market
understand the importance of incorporating corporate
sustainability into financial reports to achieve better
economic performance and realize social performance
as related directly to the company’s goals and
objectives. Indeed, GRI promotes sustainability in
financial statements and establishes financial policies
across the board. Therefore, companies that have
adopted CSR in their financial reporting promote within
organization environmental transparency and economic
social performance (Lin, 2010).
Scholars and practitioners acknowledge that
there is an existing relationship between corporate
governance and CSR. This existing relationship
promotes corporate strategy, accountability, stakeholder
engagement, and the company’s social responsibility.
The success of previous existing relationships will
depend upon the amount of support that the board of
directors is willing to provide to the company. For
example, in a study by Bogart (2013), results indicated
that 14 independent directors of the board of trustees of
seven of the U.S. Fortune 1,000 publicly traded
companies acknowledged that CSR was an important
key performance leading indicator in promoting
sustainability. Therefore, it can be determined that
boards of directors in major publicly traded companies
can influence CSR by promoting four important aspects:
(a) the board of trustees needs to have a clear
© 20 16 Global Journals Inc. (US)
 The Importance of CSR in Financial Reporting Standards

understanding of the definition of CSR and how it is
related to the organization’s strategy; (b) the
engagement of stakeholders and company’s alignment
opportunity cost; (c) promote respectful relationships
among board management team and CSR investment;
and (d) the board of directors can influence CSR
through financial reporting, internal reporting assurance,
and key financial leading indicators (Bogart, 2013).
Financial reporting quality is an important
subject in the investment arena. Over the past decade,
educating managers in the investment sector has
broadened a degree of challenge in embracing agency
problems and investment decisions from a CSR
2016
opt to implement CSR into their financial reports will
experience high financial quality performance and
improve the relationships among stakeholders
(McDermott, 2012).
A survey conducted by King and Bartels (2015)
indicated that CSR is a norm driven by regulation. The
percentages in Figure 2 reveal that corporate
responsibility (CR) in annual reports can be identified as
a trend. For example, in 2011, only 20% of companies
adopted CR reporting into their annual reports. Four
decades later, the adoption of CR in annual reports
increased by 36%. The countries that were leading in CR
financial reporting in the world’s financial market

perspective. Research studies have shown that there is between 2013 and 2015 were Taiwan (+64), South
a positive relationship between investment in CSR and Korea (+43), and Norway (+31) by average points
Year

future profitability. For example, Vollono (2010) identified (King & Bartels, 2015).
30 a positive relationship between CSR and corporate
financial performance (CFP). Therefore, companies that
Global Journal of Management and Business Research ( D ) Volume XVI Issue II Version I

Figure 2 : Rate of inclusion in annual reports rises (King & Bartels, 2015, p. 36)
Figure 3 reveals the percentages of eight
countries in three different continents including Europe,
Asia, and Africa with the highest acceptance rate of CR
reporting. This will improve the financial reporting quality
of the world’s biggest companies (G250) operating in 15
different industry sectors and 31 different countries.
According to Choi and Meek (2005), 14 years ago half
of the largest companies (G250) were reporting social
responsibility in their financial statements in the following
regions: France, Germany, Japan, the United Kingdom,
and the United States. Evidently, the adoption of CR in
financial statements has the ability to increase the
amount of relevant information provided to shareholders
and stock exchange markets around the world, which is
presently enforcing the importance of adopting CR into
financial statements.
© 2016
1 Global Journals Inc. (US)
 The Importance of CSR in Financial Reporting Standards
Figure 3 : Countries with the highest rate of CR in annual reports (King & Bartels, 2015, p. 36)
V. Conclusion
In conclusion, the CSR conceptual framework
brings more alignment in small companies than in larger
medium enterprises. CSR is understood as the universal
business of compliance by providing social benefits to
small and medium sized enterprises in the international
arena. The three most important financial reporting
standards under CSR are GRI G3 standards, AA 1000
series, and the UN Global Compact’s Communication
on Progress. Furthermore, the future of the TBL theory
will be known as IR. Notably, the IR remains in its infancy
stage where it is being piloted by publicly traded
companies. The idea behind IR is to provide a holistic
view to stakeholders where material financial information
and non-financial information can be consolidated in
one report. The countries that were leading CR financial
reporting in the global financial market between 2013
and 2015 were Taiwan (+64), South Korea (+43), and
Norway (+31) by average points (King & Bartels, 2015).
a) Recommendations for Future Studies
The author of this article suggests that the
following aspects be considered for future studies
surrounding CSR and financial statement analysis:
• Examine the relationship between CSR disclosure
requirements and sustainability in the stock
exchange markets world-wide.
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31
Global Journal of Management and Business Research ( D ) Volume XVI Issue II Version I
• Study the impact of G4 development guidelines
under GRI on the TBL theory.
• Explore the integration of sustainability into financial
statements and the evaluation of social return on
investment (SROI).
• Examine the importance of CSR measurement and
the performance of audit committees.
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 The Importance of CSR in Financial Reporting Standards
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